This must be why Braintree Inc. has the word “brain” in its company name.

The Chicago-based online-payments and data-security software provider plans to provide its clients the capability to develop software that enables e-commerce merchants to accept payments within a mobile application instead of a Web browser.

The bottom line of that technology maze?

Braintree believes it will provide merchants with the only mobile-payment software that works directly inside Apple Inc.’s iOS and Google Inc.’s Android operating systems. As such, card-data encryption takes place on the mobile device, and raw data bypass the merchant website, lowering the burden of Payment Card Industry data security standards compliance. In addition, transaction speed increases because the application provides more efficient use of mobile bandwidth.

Such a development takes plenty of brainpower.

“Few, if any other, online payments providers think as deeply as Braintree does about the applications and security in online payments,” Braintree CEO Bill Ready tells PaymentsSource. “We want to get our clients and potential clients to believe they are served best with Braintree as their provider.”

Braintree hopes to do that by offering clients’ software developers free access to its software-development libraries and sample applications to create the mobile-payment application.

Software developers for e-commerce clients such as OpenTable Inc. and Hotel Tonight Inc. have requested a technology that would work within iOS or Android instead of as a typical Web browser, Ready says.

At the same time, software developers want technology that securely handles card data without exposing raw data to the merchant’s website infrastructure, Ready adds.

Braintree’s applications encrypt data when the consumer enters card information on his mobile device, and the data move from the merchant’s server to Braintree for decryption before being forwarded to issuing banks for authorization, Ready says. Braintree, in turn, sends the merchant a token representing the customer card data for the merchant database.

“Most software developers create a ‘container’ within the mobile application to create a Web browser view so that it looks and feels like a Web page,” Ready says.

Creating a Web browser within an application is not as secure as accepting payment data from the application itself because the merchant has to handle the card data, Ready suggests. Plus, the Web browser is not as fast because it requires more network activity in making “two trips with the data” to get information to the merchant and the payment provider, whereas the mobile application uses mobile phone bandwidth to complete that process in one trip, he adds.

“What works well online is too slow for mobile environments, or it doesn’t handle security needs specific to mobile devices,” Ready says.

Braintree focused on software tools that would work within iOS or Android devices because most developers are comfortable working with those programs, Ready says. The Braintree software libraries support mobile phones and tablet devices operating with Android, iOS and Windows Phone 7 systems.

Braintree has made an effort in the past two years to be ahead of its competitors with e-commerce products that stress merchant and consumer usability and easier software integration, industry analyst Todd Ablowitz, president of Centennial, Colo.-based Double Diamond Group, LLC, tells PaymentsSource.

“What is really important about this kind of service to the software developers is that it takes the data-security hassles away from the developer or the merchant,” Ablowitz contends.

Though Braintree may not be the only online-payments provider seeking security and processing advantages for its e-commerce clients, there is no doubt “Braintree does a particularly good job” in that area,” Ablowitz suggests.

Braintree, a registered independent sales organization and member service provider of Wells Fargo Bank N.A., processes more than $4 billion in online transactions annually for more than 2,000 online merchants through its cloud-based system, Ready says.

Ready believes the access to the Braintree software libraries will represent an extra incentive for prospective clients to view his company as offering “a great payments platform for its customers.”

Braintree received attention in the payments industry last fall, when it quickly increased its online payments processing client list shortly after receiving venture capital investments (see story).

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